About Company
Dakota Business Lending offers a range of financial solutions tailored to the needs of small businesses in North Dakota, Montana, and western Minnesota. Since its establishment in 1982, Dakota Business Lending has been a trusted partner for small businesses, providing over $600 million in small business loans with a total project financing impact exceeding $1.2 billion.
With a mission to foster the success of small businesses, Dakota Business Lending offers diverse loan products such as the SBA 504 program, revolving loan funds, SBA 7a Community Advantage, and Main Street loans. These programs cater to businesses at different stages of development, from start-ups to established enterprises, offering flexible terms, competitive rates, and personalized lending strategies.
Key Features
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Prepayment Options. Differentiates between SBA 504 and SBA 7(a) loans concerning prepayment penalties. Allows early repayment of SBA 7(a) loans with a term of less than 15 years without penalties.
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Comprehensive Eligibility Assessment. Evaluates borrower capacity, character, collateral, capital, and prevailing conditions when considering loan applications. Ensures a thorough understanding of the business and its ability to meet repayment obligations.
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Documentation Transparency. Clearly outlines documentation requirements for loan applications. Common requirements include business plans, financial projections, tax returns, personal financial statements, and resumes of principal owners.
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Business Support and Resources. Recognizes the need for additional business assistance beyond financing. Refers borrowers to free entrepreneurial development resources, including Women's Business Center, SCORE Mentors, Small Business Development Center, and Veterans Business Outreach Center.
Pros and Cons
Pros
Cons
Reliability
Dakota Business Lending is widely regarded as a dependable and trustworthy financial institution, with a reputation built on decades of dedicated service to small businesses in North Dakota, Montana, and western Minnesota. While reviews on the company are scarce, its credentials speak volumes about its reliability. As a Certified Development Company authorized by the U.S. Small Business Administration (SBA), Dakota Business Lending adheres to rigorous standards of transparency, accountability, and responsible lending practices.
With over $600 million in small business loans provided and a total project financing impact exceeding $1.2 billion, Dakota Business Lending has demonstrated its commitment to fostering the growth and success of local enterprises. Additionally, its partners, such as Women's Business Centers, SCORE Mentors, and Small Business Development Centers, further underscore its dedication to supporting small business owners beyond just financing.
How to Apply for a Dakota Business Lending Loan?
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Initial Consultation. Begin by contacting Dakota Business Lending to schedule an initial consultation. During this meeting, a loan officer will discuss your business needs, financing goals, and the various loan options available to you.
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Loan Program Selection. Based on your business requirements and financial objectives, the loan officer will help you determine the most suitable loan program from Dakota Business Lending's offerings, such as the SBA 504 program, revolving loan funds, or SBA 7a Community Advantage.
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Documentation Preparation. Gather the necessary documentation required for the loan application. This typically includes items such as a business plan detailing your company's objectives, operations, and financial projections, financial statements, including income statements, balance sheets, and cash flow projections for the next 2-3 years, personal and business tax returns for the past 2-3 years and others.
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Submit Application. Complete the loan application form provided by Dakota Business Lending and submit it along with the required documentation. Be sure to provide accurate and detailed information to facilitate the review process.
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Review and Evaluation. Dakota Business Lending will conduct a comprehensive review of your loan application, assessing factors such as your business's capacity, character, collateral, capital, and prevailing market conditions. This evaluation helps determine your eligibility and the terms of the loan.
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Loan Approval. Upon approval of your loan application, Dakota Business Lending will provide you with details regarding the approved loan amount, terms, and conditions. Review these carefully to ensure they align with your expectations and business needs.
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Loan Closing. Finalize the loan agreement by signing the necessary paperwork and fulfilling any additional requirements outlined by Dakota Business Lending. This may involve coordinating with third-party lenders or other stakeholders involved in the financing process.
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Loan Disbursement. Once all requirements are met, Dakota Business Lending will disburse the approved loan amount to your business, providing you with the necessary funding to support your growth and operational objectives.
Conditions and Requirements
Conditions
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Competitive Interest Rates. Dakota Business Lending offers competitive interest rates on its loan products, ensuring affordability for borrowers. Fixed-rate options provide stability and predictability in loan payments, facilitating budgeting and financial planning for small businesses.
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Flexible Loan Terms. Borrowers can benefit from flexible loan terms tailored to their unique financing needs. Dakota Business Lending offers a range of loan durations, allowing businesses to choose terms that align with their cash flow and repayment capabilities.
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Personalized Assistance. Borrowers receive personalized assistance throughout the loan process, with experienced loan officers guiding them every step of the way. Dakota Business Lending aims to understand the unique needs and goals of each borrower, offering tailored solutions and support to facilitate their success.
Requirements
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Capacity. Borrowers must demonstrate the ability to repay the loan on time, typically assessed based on the projected cash flow of the business. A feasible business plan outlining revenue streams and expenses is crucial in illustrating repayment capacity.
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Character. Lenders assess the stability, honesty, and reliability of borrowers, which may include factors such as credit history, business experience, length of residence, and tenure in current positions. A positive track record and strong personal and professional references enhance borrower credibility.
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Collateral. Borrowers are required to provide assets that can be used as collateral to secure the loan. Collateral serves as a fallback option for lenders in case the borrower defaults on repayment. This can include business assets such as equipment, inventory, real estate, or personal assets such as homes or vehicles.
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Capital. Lenders evaluate the financial investment made by the borrower in the business, including equity contributions and retained earnings. Adequate capital demonstrates the borrower's commitment to the business and reduces the lender's risk.
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Conditions. Borrowers must meet specific conditions outlined by the lender, which may include the purpose of the loan and external factors affecting repayment, such as the local economy, industry trends, and competitive landscape. Adhering to these conditions ensures alignment with the lender's risk assessment and lending criteria.
Ways to Receive the Money
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Direct Deposit. Upon loan approval, borrowers can opt to have the funds deposited directly into their business bank account. This method offers a quick and secure way to access the funds, allowing businesses to start utilizing the financing immediately for their intended purposes.
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Wire Transfer. For expedited access to funds, borrowers may choose to receive the loan amount via wire transfer. Dakota Business Lending can transfer the funds directly to the borrower's designated bank account, typically within one business day. Wire transfers offer a swift and efficient way to receive large sums of money.
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Electronic Funds Transfer (EFT). Borrowers may also opt for electronic funds transfer (EFT) to receive the loan funds electronically. This method allows for seamless transfer of funds between financial institutions, minimizing processing time and paperwork.
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Third-Party Payment Platform. Dakota Business Lending may collaborate with third-party payment platforms or lenders to facilitate fund disbursement. In such cases, borrowers may receive the loan funds through the designated platform or lender, following the established procedures for fund transfer.
Products
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SBA 504 Program (up to $5 million or more). The SBA 504 program provides long-term financing for real estate and equipment acquisitions. Borrowers can access funding of up to 90% of the total project cost, with loan amounts typically ranging from hundreds of thousands to several million dollars. This program is ideal for businesses seeking substantial capital investments in fixed assets.
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Revolving Loan Funds (up to $250,000). Revolving loan funds offer smaller-scale financing solutions for businesses in need of working capital, equipment purchases, inventory management, or other operational expenses.
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SBA 7a Community Advantage (up to $250,000). The SBA 7a Community Advantage program targets small business start-ups and enterprises in underserved communities. The loan allows businesses to access capital for various purposes, including working capital, equipment, and expansion initiatives.
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Main Street Loans (up to $50,000). Main Street loans cater to start-up and emerging businesses with microloan needs. Borrowers can obtain the loan for the essential capital for small-scale projects, business launches, or early-stage growth initiatives.
Other Loans
Reasons for Getting Rejected for a Dakota Business Lending Loan
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Insufficient Creditworthiness. Dakota Business Lending evaluates the creditworthiness of applicants based on factors such as credit history, debt-to-income ratio, and repayment ability. Applicants with poor credit scores or a history of delinquencies may be deemed too risky for lending.
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Inadequate Collateral. Loans often require collateral to secure the funds borrowed. If applicants cannot provide sufficient collateral to cover the loan amount, Dakota Business Lending may reject the application due to the increased risk of default.
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Incomplete or Inaccurate Documentation. Dakota Business Lending requires applicants to submit thorough documentation, including business plans, financial statements, tax returns, and other relevant information. Incomplete or inaccurate documentation can hinder the evaluation process and result in rejection.
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Unsatisfactory Business Performance. Lenders assess the viability and stability of the applicant's business when considering loan applications. If the business demonstrates poor financial performance, limited growth prospects, or unsustainable operations, Dakota Business Lending may be hesitant to approve the loan.
How to Repay a Dakota Business Lending Loan?
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Understand Loan Terms. Familiarize yourself with the terms of your loan, including the repayment schedule, interest rate, and any associated fees or penalties. Dakota Business Lending provides clear and transparent terms to borrowers, allowing you to plan and budget for loan repayment.
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Set Up Automatic Payments. Consider setting up automatic payments from your business bank account to ensure timely repayment of your loan. Automatic payments can help you avoid late fees and penalties while simplifying the repayment process by eliminating the need for manual payments.
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Contact the Lender. If you encounter difficulties or anticipate challenges in making loan payments, communicate proactively with Dakota Business Lending. Lenders understand that businesses may face unexpected circumstances, and they may be willing to work with you to find solutions, such as modifying repayment terms or adjusting payment schedules.
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Explore Refinancing Options. If you're struggling to meet loan payments or if you find more favorable terms elsewhere, consider refinancing your loan with Dakota Business Lending or another lender. Refinancing can help lower monthly payments, reduce interest rates, or extend the loan term, making repayment more manageable for your business.
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Monitor Interest Rates. Keep an eye on prevailing interest rates and explore opportunities to refinance your loan if interest rates decrease significantly. Refinancing at a lower rate can help reduce the overall cost of borrowing and lower your monthly payments.
Alternatives
Wells Fargo offers a versatile line of credit tailored to businesses with at least two years of operation, providing access to funds up to $150,000. With competitive rates estimated between 10.25% to 18.25% APR, this financing option caters to businesses seeking flexible capital solutions. The line of credit allows borrowers to draw funds as needed, providing financial support for various operational and growth initiatives.
Chase extends a revolving credit line with a maximum loan amount of $250,000, ideal for established businesses with a minimum credit score of 700. This financing option offers the flexibility to withdraw funds as required, providing businesses with access to capital for ongoing expenses, expansion projects, or unforeseen financial needs. While strong credit and a minimum of two years in business are typically required, Chase's revolving credit line presents competitive terms and valuable financial flexibility.
OnDeck specializes in providing fast-term loans tailored to small-business owners, offering loan amounts of up to $250,000. With a minimum credit score requirement of 625, OnDeck caters to entrepreneurs with less-than-stellar credit who seek opportunities for business expansion. Despite a higher estimated APR ranging from 35.40% to 99.90%, OnDeck's streamlined application process and quick funding turnaround make it an attractive option for businesses in need of swift financing solutions.
Fora Financial offers flexible financing solutions, including term loans with a maximum amount of $1,500,000, catering to a wide range of borrowers. With a minimum credit score requirement of 500, Fora Financial accommodates borrowers who may not qualify for traditional bank financing. This financing option is well-suited for young but established small businesses seeking rapid access to capital, providing a valuable alternative to traditional lending avenues.
Loans like Dakota Business Lending
OnDeck
OnDeck stands out as an excellent choice for short-term business loans, offering the flexibility of borrowing substantial amounts, even for businesses with a minimum credit score. What makes OnDeck particularly attractive is its ability to provide funds swiftly, with same-day approval and disbursement for qualifying applicants. Moreover, OnDeck emphasizes the opportunity to build and strengthen business credit by consistently making on-time payments. The loan terms range from 18 to 24 months, with loan amounts spanning from $5,000 to $250,000. While the starting interest rate is 35.40% for a portion of customers, the accessibility and speed of funding make OnDeck a notable player in the short-term business loan landscape.
Funding Circle
Funding Circle distinguishes itself in the realm of long-term business loans by offering competitive rates, extended repayment terms, and a lack of prepayment penalties. This lending option caters to businesses seeking larger loan amounts, ranging from $25,000 to $500,000, with a reasonable starting interest rate of 11.29%. Beyond financial support, Funding Circle prioritizes efficiency, enabling businesses to access funds in as little as two business days. Notably, Funding Circle also showcases its commitment to diversity by providing funding options specifically tailored for women-owned businesses and minority entrepreneurs. The loan terms extend from 6 to 84 months, making Funding Circle a favorable choice for businesses with a more extended financial horizon.
Credibly
Credibly positions itself as a reliable source for working capital loans, particularly for businesses requiring quick funding to address immediate operational needs like payroll or inventory expenses. Notably, Credibly's working capital loans boast a rapid approval process, often providing funds in less than 24 hours. The lender exhibits flexibility by considering applicants with a minimum credit score of 500 and a willingness to look beyond a less-than-perfect credit history, provided there is a healthy annual revenue. Beyond working capital loans, Credibly collaborates with a network of lenders to offer a diverse range of financing options, including merchant cash advances, business lines of credit, equipment financing, SBA loans, and invoice factoring.
Fundbox
For startups in need of swift financing, Fundbox presents an appealing option with its business line of credit, offering up to $150,000. What sets Fundbox apart is its relatively lenient eligibility criteria, allowing new companies to qualify after just six months of operation and a minimum annual revenue of $100,000. The business line of credit provides the flexibility to withdraw funds as needed, and businesses only pay interest on the amount utilized. Additionally, Fundbox offers perks such as up to 20% off fees through its Fundbox Plus upgrade. With competitive starting interest rates ranging from 4.66% for 3-month terms to 8.99% for 6-month terms, Fundbox addresses the financial needs of emerging businesses seeking quick and accessible startup loans.
Editorial Opinion
Important
How to Choose a Lender
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Make sure to confirm whether the lender is licensed to operate in your state. You can verify this information with your state regulator or attorney general.
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Check if the lender is a member of a reputable association, such as the Community Financial Services Association of America. Membership in such organizations may provide an extra level of reliability.
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Carefully review all the terms and conditions of your payday loan contract.
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Thoroughly examine the interest rates on payday loans and ensure that your contract includes a detailed breakdown of the total cost of the loan.
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Take advantage of your right of rescission. Usually, you can rescind the loan within three days after signing the agreement. Alternatively, there is typically a "cooling-off" period, which allows you several days to thoroughly review the contract before making an informed decision to enter into a consumer loan agreement based on the terms specified by the lender.
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Choosing a payday lender is a significant decision that demands careful consideration and a good understanding of how such organizations operate.
Methodology
At Finanso, we've carried out a comprehensive analysis of over 50 business lenders, assessing them based on 35 different parameters across six key categories: accessibility of loans, customer relations, quality of service, interest rates, and transparency of conditions.
In each category, we carefully considered the most critical factors in selecting a lender. These factors include the interest rates, available loan amounts, minimum credit score, minimum income, application fees, and the speed at which funds are transferred.
At Finanso, we highly value our users, which is why we also focus on the quality of customer service, user reviews, and additional features that can aid our users in making a well-informed decision.
Our ultimate goal is to provide insightful recommendations and expert advice to assist you in selecting a lender that best caters to your specific needs.
Additional Resources
- Dakota Business Lending Account Review
- How to Apply for Dakota Business Lending Loan
- How to PayOff Dakota Business Lending Loan
- Dakota Business Lending Mobile Apps
- Dakota Business Lending Reviews
